Future Financial Trends: "Cross-Border Payment Tokenization to Lower Transaction Costs"

Eight Megatrends Reshaping the Future of Finance
Deloitte Korea Group Analyzes Key Trends:
Multi-Bank Tokenization, AI-Driven Fraud Detection,
Alternative Assets, and More

As the financial industry is undergoing rapid transformation driven by technological advancements such as digital transformation and artificial intelligence (AI), Deloitte Korea Group announced on the 24th that it has published a report analyzing the key trends shaping the financial ecosystem.

The report highlights the emergence of "multi-bank tokenization networks" as a breakthrough in cross-border payment innovation. According to the report, "Governments and private companies around the world are focusing on tokenizing regulated assets and settling them in real time on integrated ledgers to enable fast and secure cross-border transfers of digital currencies." The report further analyzes, "This approach significantly reduces costs and time by minimizing intermediary steps, and is expected to lower the average annual transaction costs?including transaction fees and technical expenses incurred by companies to complete cross-border payments?by approximately 53%, totaling more than $50 billion by 2030."

Tokenized payments integrate payment instructions and fund transfers on the blockchain and use smart contracts to execute automatic payments when specific conditions are met, thereby enhancing efficiency and transparency. In the short term, stablecoins are considered the most promising solution. The "stablecoin sandwich" method, in which the sending bank converts its local currency into a stablecoin, transfers it via blockchain, and the receiving bank instantly exchanges it into the local currency, is drawing particular attention.

To drive these changes, "Project Agora," led by the Bank for International Settlements (BIS), involves seven central banks and 41 financial institutions developing a prototype for tokenized currency payments, with the goal of completing technical research by the end of 2025. However, incomplete regulations and issues with technological interoperability remain as ongoing challenges.

In the non-life insurance sector, smart "insurance fraud response" is also creating a new market. By analyzing various data in real time, AI can identify sophisticated fraud patterns, which is expected to reduce fraudulent claim costs by up to $160 billion by 2032. Additionally, as non-life insurers face limitations in raising premiums alone, they are shifting their business models from "post-incident handling" to "predictive prevention"-focused risk management services, which are gaining attention as new sources of revenue.

In asset management, individual investors' participation in the private market is emerging as a new growth driver. Although currently minimal, regulatory easing is expected to fuel explosive growth, with private equity holdings by individual investors in the United States and Europe projected to reach $2.4 trillion and 3.3 trillion euros, respectively, by 2030.

As traditional commercial real estate (CRE) portfolios are being restructured around "alternative assets" such as data centers, communication towers, and life science facilities, alternative assets are emerging as a new pillar. In the United States, alternative assets have delivered significantly higher returns than traditional assets over the past decade, and are expected to account for 70% of CRE portfolios by 2034.

Furthermore, active ETFs are rapidly expanding their presence in the market by combining the advantages of active fund management with the transparency, flexibility, and low cost of the ETF structure. The assets under management (AUM) of active ETFs in the United States are projected to grow approximately thirteenfold, from $856 billion in 2024 to $11 trillion by 2035.

The new logotype unveiled by Deloitte Anjin.

The report also introduces the trend of "AI-driven productivity in bank software engineering." Banks are currently adopting AI in software development, resulting in significant cost savings and productivity improvements. Developers are already actively utilizing LLM-based coding tools, and banks are expected to reduce software investment costs by up to 40% by 2028 through these technologies.

The trend of "tokenized real estate driving innovation in wealth management" is also significant, as asset tokenization is emerging as a new and flexible financial solution in the real estate market. The global blockchain-based tokenized real estate market is projected to grow at an average annual rate of 27%, from less than $300 billion in 2024 to $4 trillion by 2035.

Min Hongki, Head of the Financial Services (One FSI) Division at Deloitte Korea Group, stated, "In a rapidly changing financial industry, it is more important than ever to secure competitiveness based on strategic insight, to accurately understand the direction of change, and to respond proactively." He added, "We hope this report provides meaningful insights for financial institutions, investors, and policymakers alike."